The two sessions of the National People’s Congress in 2022 are about to open. This year, Li Dongsheng, deputy to the National People’s Congress and founder of TCL, brought five suggestions on hot social issues such as combating cyber violence, improving social security for flexible employees and “establishing a pilot of personal carbon quota system”. This year is also his 20th consecutive year as a deputy to the National People’s Congress.
Globalization has always been a topic of concern to Li Dongsheng. This year, he put forward “suggestions on promoting the upgrading of China’s manufacturing industry and building a global industrial chain” on how Chinese enterprises can accelerate globalization and help “double circulation”.
On March 1, Li Dongsheng talked about his observation and Thinking on the going out of manufacturing industry in an interview with media reporters such as Huaxia times. Li Dongsheng believes that in order to maintain the security and stability of China’s industrial chain and continuously promote China’s industry to move towards the middle and high-end of the global industrial value chain, as a Chinese enterprise, strengthening the global operation ability and the construction of the global industrial chain supply chain has become a compulsory topic. China’s “double circle” of trade barriers will be broken and a new pattern of trade protectionism based on China’s “double circle” will be formed.
once again making suggestions on globalization
Chinese enterprises are facing the dilemma of “front and rear attack” when going to sea, and the “innovation encirclement and suppression” of developed countries. Li Dongsheng believes that industrial globalization is an important way for the future development of China’s science and technology manufacturing industry.
In this year’s representative’s proposal, he suggested that the state, on the one hand, take advantage of the opportunity of this round of industrial chain reconstruction to promote institutional opening, attract foreign high-tech manufacturing enterprises to invest and set up factories in China and form industrial clusters, on the other hand, encourage and support China’s leading enterprises to extend their industrial manufacturing advantages overseas and set up R & D and production bases, Accelerate the construction of global industrial chain.
In addition, Li Dongsheng also proposed to carry out regional economic cooperation. One belt, one road, China, will be developed to promote regional economic cooperation and industrial cluster clustering.
According to the reporter of Huaxia times, this year is the second consecutive year that Li Dongsheng made suggestions on the issue of “globalization”. Last year, he put forward “suggestions on supporting Chinese enterprises to strengthen double circulation and accelerate globalization”. He said at that time that Chinese enterprises are still at the middle and low end of the global value chain, so they need to “go out” and expand their competitive advantage to the global market.
Behind this, globalization has become a collective issue faced by Chinese manufacturing enterprises. In 2020, the added value of China’s manufacturing industry will be 26.6 trillion yuan, accounting for nearly 30% of the world, ranking firmly as the world’s largest manufacturing country.
However, Li Dongsheng also mentioned that there are more and more restrictions on promoting internationalization through product trade export in the past two years. According to the traditional way of product export, its growth has reached the ceiling. “The future development model of Chinese enterprises overseas should consider social responsibility, more fairness and better efficiency improvement. Therefore, in the process of economic globalization, we should change from exporting products to exporting industrial capacity.” He believes that the only way for China’s manufacturing industry to further expand its share and expand its position in the global industry is to deploy the industrial chain to the world.
The globalization of the industrial chain will also drive the export growth of upstream raw materials, key equipment and other fields. Li Dongsheng revealed that last year, TCL’s export volume reached US $19.42 billion, a year-on-year increase of 70%, higher than TCL’s overseas revenue. “Most of the 19.42 billion US dollars last year were materials and core devices, such as panel export and photovoltaic silicon wafer export, rather than the export of complete machine products in the past.”
“The standards of world-class enterprises are technological innovation ability and global competitiveness. For the manufacturing industry, global competitiveness means global industrial layout and competition with multinational giants on a global scale.” He also said in the interview that day.
how to deal with the risk of anti globalization
Building global competitiveness has always been an important strategic fulcrum for TCL’s development.
Li Dongsheng revealed that TCL’s overseas revenue reached 117.4 billion in 2021, an increase of 60%. When he was selected as the “top ten economic figures of the year” in 2021 in January this year, he mentioned that TCL (Group) had a revenue of more than 250 billion in 2021. Based on this rough calculation, TCL’s overseas revenue has been close to half of its total revenue.
However, on the other hand, the anti globalization tide generated by the superposition of epidemic and trade protectionism is leading to the regionalization and short chain of industrial chain, which is also considered to be the biggest risk of China’s manufacturing globalization.
TCL is a Chinese enterprise that went abroad earlier. Li Dongsheng told reporters of Huaxia times and other media that as a pioneer, TCL has three experiences in dealing with the risks of anti globalization: “first, adjust the layout of overseas industrial chains to effectively avoid trade barriers. Second, take root locally and improve the level of localized operation. Third, continue to increase R & D investment, establish a global R & D system, pool global wisdom, grow its own strength and improve the R & D capability of core technologies.”
In terms of global industrial chain, according to the reporter of Huaxia times, TCL is actively adjusting. At present, TCL has expanded output in its factories in Mexico, Vietnam, Brazil and Poland, Indian factories have also started production recently, and central semiconductor has also started construction in Malaysia, the Philippines and other places.
Up to now, TCL has set up 42 R & D centers and 32 manufacturing bases around the world. Its business covers more than 160 countries and regions. Its product sales include smart screen, air conditioner, intelligent mobile and connected equipment, refrigerator, washing machine, health appliances, intelligent voice, etc.
Li Dongsheng also told reporters of Huaxia times and other media that TCL’s global business methods in different countries and regions are not the same. “In developed countries such as Europe, America and Japan, we should develop new products to meet the needs of the local market through product technology innovation to expand our business. In developing countries, we should make more use of the local industry and supply chain capabilities to expand our business.”
Even if the same supply chain is established, Li Dongsheng also said that different countries will have different difficulties and challenges.
For example, he said that Vietnam’s factories are close to China and have high logistics efficiency. To be competitive, we need to consider factors such as factory operation efficiency, process capability, staff quality and social stability. The establishment of factories in Brazil will give more consideration to how to make the logistics supply chain more in place. “In Brazil, it may be more necessary to consider supporting and supporting the development of local suppliers, so as to effectively support our local business.”
In recent years, China Hi-Tech Group Co.Ltd(600730) technology industry has faced some “neck sticking” problems in overseas supply chain. Li Dongsheng believes that how to break through the technical bottleneck to maintain their own development is a problem that enterprises have to face and solve. But on the other hand, he also believes that it is unrealistic and unreasonable to take everything back and do it yourself. “I think that for some projects, equipment and materials that are difficult to form a monopoly blockade abroad, we can continue to purchase overseas under the principle of international division of labor. Focus on these areas that need to be done by ourselves as much as possible and concentrate our efforts to break through the bottleneck of China’s industrial transformation and upgrading.”
